What happened to Welcome Finance in the UK

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Welcome Finance was a UK-based, subprime lender, that provided personal loans and other financial products to consumers with poor credit histories. The company was founded in the early 1990s and grew rapidly during the 2000s, eventually becoming one of the largest subprime lenders in the country. However, Welcome Finance ran into financial difficulties in the late 2000s and was ultimately forced to enter administration in 2010.

Welcome Finance's business model was based on providing loans and other financial products to people with poor credit ratings, who might otherwise struggle to access credit from mainstream lenders. The company typically charged higher interest rates and fees than mainstream lenders, reflecting the higher risk of default associated with lending to consumers with poor credit histories. Welcome Finance also offered a range of insurance products, such as payment protection insurance (PPI), which it sold alongside its loans.

Welcome Finance's problems began in the late 2000s, when the global financial crisis hit. The crisis had a significant impact on the subprime lending industry in the UK, as many borrowers defaulted on their loans. Welcome Finance was particularly exposed to the crisis, as it had lent large sums of money to borrowers with poor credit ratings, who were more likely to default on their loans. As a result, Welcome Finance's loan portfolio became increasingly distressed, and the company began to struggle.

In 2010, Welcome Finance was forced to enter administration, a process in which a company's assets are managed by an independent third party in order to pay off its debts. The company's assets were sold off, and its remaining business was wound down.

After Welcome Finance entered administration, the UK's Financial Conduct Authority (FCA) launched an investigation into the company's business practices. The investigation revealed that Welcome Finance had engaged in a number of questionable practices, including mis-selling PPI and failing to adequately assess the creditworthiness of its borrowers. As a result of the investigation, Welcome Finance was fined £2.8 million by the FCA.

The collapse of Welcome Finance had significant consequences for its borrowers, many of whom were left with unpaid loans and no means of repaying them. Many borrowers also lost the money they had paid for PPI policies, as these policies were often worthless. The collapse of Welcome Finance also had a wider impact on the subprime lending market in the UK, as it contributed to a decline in the number of subprime lenders operating in the country.